Correlation Between SolarEdge Technologies and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both SolarEdge Technologies and Arm Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SolarEdge Technologies and Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolarEdge Technologies and Arm Holdings plc, you can compare the effects of market volatilities on SolarEdge Technologies and Arm Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SolarEdge Technologies with a short position of Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolarEdge Technologies and Arm Holdings.
Diversification Opportunities for SolarEdge Technologies and Arm Holdings
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SolarEdge and Arm is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc and SolarEdge Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SolarEdge Technologies are associated (or correlated) with Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of SolarEdge Technologies i.e., SolarEdge Technologies and Arm Holdings go up and down completely randomly.
Pair Corralation between SolarEdge Technologies and Arm Holdings
Given the investment horizon of 90 days SolarEdge Technologies is expected to generate 1.73 times more return on investment than Arm Holdings. However, SolarEdge Technologies is 1.73 times more volatile than Arm Holdings plc. It trades about 0.3 of its potential returns per unit of risk. Arm Holdings plc is currently generating about -0.05 per unit of risk. If you would invest 1,413 in SolarEdge Technologies on November 28, 2024 and sell it today you would earn a total of 581.00 from holding SolarEdge Technologies or generate 41.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolarEdge Technologies vs. Arm Holdings plc
Performance |
| Timeline |
| SolarEdge Technologies |
| Arm Holdings plc |
SolarEdge Technologies and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolarEdge Technologies and Arm Holdings
The main advantage of trading using opposite SolarEdge Technologies and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarEdge Technologies position performs unexpectedly, Arm Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Arm Holdings will offset losses from the drop in Arm Holdings' long position.| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Canadian Solar | SolarEdge Technologies vs. Enphase Energy |
| Arm Holdings vs. Mesa Air Group | Arm Holdings vs. SkyWest | Arm Holdings vs. Church Dwight | Arm Holdings vs. Eastern Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |